Sales tax could fuel Galena Avenue business redevelopment

Monday

Mar 5, 2018 at 9:10 PMMar 5, 2018 at 9:10 PM

Derrick Mason Staff writer

FREEPORT — The City Council will decide soon whether to designate the area along West Galena Avenue as a business district.

If the area, which includes the 48 properties along West Galena Avenue from the west side of North Whistler Avenue on the east and City Street on the west, is declared a business district, it will allow the city to impose a 1 percent sales tax on everything purchases in the district. The Business District Retailers' Occupation and Service Occupation Tax would not apply to purchases such as qualifying food, drugs and medical appliances.

The city in July contracted Ehlers & Associates to complete a $17,000 feasibility study to determine whether the Galena Corridor, which includes the Park Plaza Shopping Center, could be turned into a tax increment financing district. The study showed that a TIF could not be supported. A business district was the next best thing, City Manager Lowell Crow said.

“We believe a business district is the best way to go forward,” he said. “It will add an additional 1 percent tax that will then be returned back to those businesses as a redevelopment agreement,” he said.

The sales tax would be used to redevelop the area through the construction or new buildings and the revitalization of existing structures through site planning, facade improvements and use of construction methods that bring cohesive design features to the district.

Individual businesses would only be able to use the money generated by their own sales and would have need to have a redevelopment agreement approved by the City Council. Money that is generated by the tax not claimed by existing businesses could then be used by new developers, Crow said.

“(Property owners) only get the money that is generated by their piece of property so it encourages them to promote growth within their company,” Crow said. “We actually have a letter of intent from two other developers in this area.

“One is the developer that wants to redevelop the Eagle’s and there’s another that’s looking for a piece of property that says if we can get this business district passed and they can close on their property they’ll move forward and redevelop these properties.”

If approved, the tax would go into place July 1. The business district would last for 23 years.

A public hearing will be held at 5:30 p.m. March 15 at City Hall, 314. W. Stephenson St.